It’s not every day that the Council of Europe (CoE) tops the news bulletins, and unusual for a little-known Swiss senator to make headlines across the world. The 46-member human rights watchdog is routinely confused with the European Council – that’s the EU when it meets at head of government level. The Strasbourg-based body has no power at all – except to suspend members who break the rules.

But the CoE’s Dick Marty dropped a bombshell this week when he suggested that European governments may have been secretly cooperating with the US in its practice of kidnapping terrorist suspects -“extraordinary rendition” in American bureaucratese. That has given the organisation its rare moment in the limelight – and generated fresh embarrassment around a highly controversial issue.

The row has burst out over steadily accumulating evidence that the US has been using renditions to abduct prisoners and send them, via European airports, to be detained and tortured in countries like Egypt, Morocco and Jordan, where observance of basic human rights is patchy to poor.

With sparks flying across the Atlantic again, Condoleezza Rice faced a barrage of questions during her European tour: the secretary of state admitted that renditions do take place but insisted that the US does not condone torture. That, it was widely noted, however, does not constitute a denial that torture is used. And American definitions of what constitutes torture have in any event become alarmingly elastic.

Washington has also conspicuously failed to confirm or deny reports that the CIA has been using secret “black” prisons in eastern Europe – Poland and Romania insist they are not involved – to hold prisoners outside any legal jurisidiction. At the same time, more information has surfaced about clandestine flights – thanks to planespotters who recorded registration numbers and journalists who painstakingly traced the ownership of the aircraft, plotted their routes, cross-referenced them with prisoner testimonies and pieced the jigsaw together.

The most damaging statement from the bearded, bespectacled Mr Marty was that secret services in some EU countries may have collaborated over the flights – though he admitted he had no evidence to corroborate the claim. “I think it would have been difficult for these actions to have taken place without a degree of collaboration,” he said. “But it is possible that secret services did not inform their governments.”

Many observers have argued that it seems barely credible that intelligence and security agencies, which work closely with the CIA, were unaware of what was going on. It is possible of course that the US decided not to officially inform friendly governments precisely in order to avoid a ruckus. Experts warn though that turning a blind eye to illegality is itself illegal.

The revelations have proved especially awkward for Germany, where the government has admitted it knew of the case of Khaled al-Masri, a Lebanese-born citizen kidnapped by the Americans in Macedonia and held in Afghanistan – though only after he had been freed in Albania. But Frank-Walter Steinmeier, the foreign minister, denied flatly that it had given any assistance to the abduction of German citizens. An admission to the contrary would have been remarkable since the Red-Green government of Gerhard Schr’der, in office at the time, was a vigorous opponent of the Iraq war.

Controversy over the issue is also strong in Britain, where Iraq is still an open wound and MPs have set up an all-party committee on renditions, working with civil liberties groups to maintain pressure on the government. Coincidentally, the Law Lords last week ruled that evidence obtained using torture was inadmissible in British courts.

Jack Straw, the foreign secretary, has insisted the government had no evidence of rendition flights – though he did acknowledge that it had been informed when the practice began under the Clinton administration. To some, his answer was similar to Dr Rice’s: careful, evasive and lawyerly. He might well have no records, but maybe records weren’t the point. More direct and detailed questions may prove harder to deflect.

Fresh information seems certain to emerge, probably from ever-leaky Washington. But renditions have already highlighted sharp differences between Europe and America about how to fight terrorism and respect the law. On Thursday, the European Parliament (EP) followed the Council of Europe and set up its own investigation. “This is a crucial and fundamental issue,” declared Elmar Brok, chairman of the EP foreign affairs committee. “The West’s credibility is at stake.”

Europeans have watched in dismay since the September 11 attacks as the Bush administration has re-interpreted international obligations, from the Geneva conventions on prisoners of war to the UN convention on torture, to suit its own purposes. The scandals involving prisoner abuse at Guant’namo Bay and Abu Ghraib have been highly damaging. But so have the attempts by Dick Cheney, the vice-president, to allow the CIA to use illegal techniques such as “waterboarding”, when a prisoner is made to feel he is drowning.

Americans sometimes complain that Europeans patronise them when it comes to terrorism, lecturing them on their long experience with the IRA, Red Brigades, ETA, Baader-Meinhof and Middle Eastern groups from Algerians to Palestinians. Europeans counter that the Americans have simply got it wrong. As Chris Patten, the former EU external affairs commissioner, wrote in his recent memoirs: “The ‘war on terrorism’ has been understood in Europe as a metaphor: a phrase to describe the myriad responses required of the civilised world to address problems that do not admit of definitive solutions, let alone military ones.”

Still, despite disagreements, the last four years have seen intensified transatlantic and intra-European anti-terrorist cooperation in many areas: retention of internet and telephone data, asset freezes, border security arrangements, and the new EU arrest warrant replacing lengthy extradition arrangements. Intriguingly, in a passage that was expunged from the official EU record at US request, Washington and Brussels agreed in 2003 to improve cooperation on “increased use of European transit facilities to support the return of criminal/inadmissible aliens … and improving co-operation in removals”. That statement, unearthed by the Statewatch human rights monitor, seems destined to become part of the growing mountain of documentation about extraordinary renditions.

European anger has been matched by annoyance in the US, reviving prejudices of the old “warriors versus wimps” variety. “Europe,” complained a columnist in the conservative Washington Times, “is in the throes of one of those fits of anti-American hysteria that seems to seize the Old Continent with predictable regularity. Any shadow of a rumour, any smidgeon of information that, if true, could reflect badly on the United States, sells newspapers in Europe like hotcakes and tends to warm people’s hearts with the thought that at least they are not like Americans.”